US President Donald Trump has signed an executive order declaring a national emergency and barring US companies from using telecommunications equipment made by firms posing a national security risk.

Key points:

The executive order allows for a ban on networking equipment made by Huawei

The order does not mention Huawei but US officials have previously labelled the company a "threat"

The move comes at a delicate time in trade relations between China and the US

The order paves the way for a ban on US companies doing business with China's Huawei.

The executive order invokes the International Emergency Economic Powers Act, which gives the President the authority to regulate commerce in response to a national emergency that threatens the United States.

The order directs the Commerce Department, working with other government agencies, to draw up a plan for enforcement within 150 days.

The order, which has been under review for more than a year, is aimed at protecting the supply chain from "foreign adversaries to the nation's information and communications technology and services supply chain," said Commerce Secretary Wilbur Ross.

"Under President Trump's leadership, Americans will be able to trust that our data and infrastructure are secure," he said.

A senior Trump administration official told the ABC the order, which does not specifically name any nation or business, "is company and country agnostic".

But chairman of the judiciary committee Lindsey Graham has said it is aimed at China and Huawei.

US officials have previously labelled Huawei a "threat" and actively lobbied allies to not use Huawei network equipment in next-generation 5G networks.

Washington believes equipment made by Huawei could be used by the Chinese state to spy.

Huawei, which has repeatedly denied the allegations, did not immediately comment.

How will this affect companies already using Huawei?

According to the senior Trump administration official, the rules of the order will apply to "any transaction initiated, pending or completed after the date of the executive order, which is today."

The official said interim regulations would be issued within the next 150 days.

But it is not clear how the order will impact on companies who already use or who are installing Huawei products.

"As we put out these interim regulations and we solicit comment and feedback, we don't anticipate providing informal guidance regarding particular sectors or transactions before that 150 days is expired," the official said.

"And so it will be a very iterative process and open and transparent process with the community and stakeholders at large as we build towards that final rule."

While large US wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper.

The US has been actively pushing other countries not to use Huawei's equipment in next-generation 5G networks that it calls "untrustworthy".

In August, Mr Trump signed a bill that barred the US Government itself from using equipment from Huawei and another Chinese provider, ZTE Corp.

Federal Communications Commission chairman Ajit Pai, who has called Huawei a threat to US security, said "given the threats presented by certain foreign companies' equipment and services, this is a significant step toward securing America's networks".

Huawei and 70 of its affiliates have also been added to the Commerce Department's so-called "Entity List", a move that will make it more difficult for the company to buy parts and components from US businesses.

US officials said the move, which is backed by Mr Trump, would also make it difficult for Huawei to sell some products because of its reliance on US suppliers.